BIOS:NASDAQ

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News Release

BioScrip Reports Third Quarter 2017 Financial Results

November 2, 2017 at 8:00 AM EDT

– Net revenue of $198.7 million , including core product mix of 75.0%, compared to 65.8% in the prior year
– Net revenue and adjusted EBITDA reduced $10.0 million and $3.0 million , respectively, due to sales disruption from Hurricane Irma, Hurricane Harvey, and completion of the UnitedHealthcare contract transition
– Net loss from continuing operations of $12.4 million , compared to $11.1 million in the prior year
– Adjusted EBITDA of $13.0 million , more than three times the prior year, driven by a 590 basis point improvement in gross profit margin and a $4.8 million reduction in operating expenses
– Operating cash use of $0.3 million , reflecting $15.8 million of interest, including $8.9 million of bi-annual bond interest payments, and $19.6 million of operational and working capital improvements over the prior year
– Discontinued operations cash use of $5.6 million , inclusive of settlement payment accrued in the fourth quarter of 2016
– Liquidity of $43.0 million , including $33.0 million of cash
– Full year revenue guidance updated to $805 million to $810 million and full year adjusted EBITDA guidance updated to $42 million to $44 million

DENVER , Nov. 02, 2017 (GLOBE NEWSWIRE) -- BioScrip, Inc. (NASDAQ:BIOS) ("BioScrip" or the "Company"), the largest independent national provider of infusion and home care management solutions, today announced its third quarter 2017 financial results. For the third quarter, the Company reported revenue from continuing operations of $198.7 million , net loss from continuing operations of $12.4 million , and adjusted EBITDA of $13.0 million .

“BioScrip delivered adjusted EBITDA of $13.0 million during the third quarter of 2017, while completing the UnitedHealthcare contract transition and enduring disruption from both Hurricane Harvey and Hurricane Irma, which impacted 12 of our branches,” said Daniel E. Greenleaf, President and Chief Executive Officer. “I am extremely proud of the significant progress the team has made on the turnaround plan since I joined the company just over a year ago. The turnaround plan is on schedule, driven by success in our CORE initiatives which has driven much improved and sustainable profitability and cash flow. With the UnitedHealthcare contract transition complete, we look forward to Core revenue acceleration.”

2017 Guidance

The Company has updated its revenue guidance for the full year 2017 to a range of $805.0 million to $810.0 million , reflecting the disruption from the hurricanes and the UnitedHealthcare contract transition during the third quarter, and the resulting lower patient census to begin the fourth quarter. The Company has also updated its adjusted EBITDA guidance to a range of $42.0 million to $44.0 million for full-year 2017, reflecting the third quarter results and the impact of updated revenue guidance for 2017. The Company expects to incur restructuring expenses in a range of $11.5 million to $12.0 million in 2017.

Conference Call and Presentation

BioScrip will host a conference call and live webcast, November 2, 2017 , at 9:00 a.m. Eastern Time , to discuss its third quarter 2017 financial results. Interested parties may participate by dialing 888-372-9592 (US) or by accessing a link under the "Investors" section on the Company's website at www.bioscrip.com.

A replay of the conference call will be available two hours after the call's completion by dialing 855-859-2056 (US) and entering conference call ID number 1115410. An audio webcast and archive will also be available two hours after the call’s completion under the “Investors" section of the Company's website.

About BioScrip, Inc.

BioScrip, Inc. is the largest independent national provider of infusion and home care management solutions, with approximately 2,200 teammates and nearly 80 service locations across the U.S. BioScrip partners with physicians, hospital systems, payors, pharmaceutical manufacturers and skilled nursing facilities to provide patients access to post-acute care services. BioScrip operates with a commitment to bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. By collaborating with the full spectrum of healthcare professionals and the patient, BioScrip provides cost-effective care that is driven by clinical excellence, customer service, and values that promote positive outcomes and an enhanced quality of life for those it serves.

This press release includes statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements regarding 2017 guidance, projections of certain measures of the Company's results of operations, projections of future levels of certain charges and expenses, expectations of Home Solutions cost synergies and incremental cost structure improvements and other statements regarding the Company's financial improvement plan and strategy and anticipated effects of the Cures Act and the UnitedHealthcare contract. You can identify these statements by the fact that they do not relate strictly to historical or current facts. In some cases, forward-looking statements can be identified by words such as "may," "should," "could," "anticipate," "estimate," "expect," "project," "outlook," "aim," "intend," "plan," "believe," "predict," "potential," "continue" or comparable terms. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. Important factors that could cause actual results to differ materially from those in the forward-looking statement include but are not limited to risks associated with: the Company’s ability to successfully integrate the Home Solutions business into its existing businesses; the Company’s ability to grow its core Infusion revenues; the Company's ability to continue to execute its financial improvement plan to reduce operating costs and focus its business on its Infusion Services segment; the Company’s ability to evaluate opportunities for improvement and implement solutions as part of its strategic review process; the Company’s ability to comply with the covenants in its debt agreements or obtain amendments to such covenants; the UnitedHealthcare contract termination, including potential accounting charges and impacts on other contract provisions and their associated revenue; the success of the Company’s initiatives to mitigate the impact of the Cures Act on its business; reductions in federal, state and commercial reimbursement for the Company's products and services; increased government regulation related to the health care and insurance industries; as well as the risks described in the Company's periodic filings with the Securities and Exchange Commission . The Company does not undertake any duty to update these forward-looking statements after the date hereof, even though the Company's situation may change in the future. All of the forward-looking statements herein are qualified by these cautionary statements.

Note Regarding Use of Non-GAAP Financial Measures

In addition to reporting financial information in accordance with generally accepted accounting principles (GAAP), the Company is also reporting Adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be used in isolation or as a substitute or alternative to net income, operating income or any other performance measure derived in accordance with GAAP, or as a substitute or alternative to cash flow from operating activities or a measure of the Company’s liquidity. In addition, the Company's definition of Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies. Adjusted EBITDA, as defined by the Company, represents net income before net interest expense, income tax expense, depreciation and amortization, impairment of goodwill, stock-based compensation expense, and restructuring, integration and other expenses. As part of restructuring, the Company may incur significant charges such as the write down of certain long−lived assets, temporary redundant expenses, retraining expenses, potential cash bonus payments and potential accelerated payments or terminated costs for certain of its contractual obligations. Management believes that Adjusted EBITDA provides useful supplemental information regarding the performance of BioScrip’s business operations and facilitates comparisons to the Company’s historical operating results. For a full reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, please see the attachment to this earnings release.

Schedule 1

BIOSCRIP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except for share amounts)

(unaudited)

September 30, 2017

December 31, 2016

ASSETS

Current assets

Cash and cash equivalents

$

33,013

$

9,569

Restricted cash

4,950

-

Receivables, less allowance for doubtful accounts of $46,820 and $44,730

117,682,543 shares issued and outstanding as of September 30, 2017 and

December 31, 2016, respectively

13

12

Treasury stock, 5,106 and no shares outstanding as of September 30, 2017 and

December 31, 2016, respectively

(16

)

-

Additional paid-in capital

626,567

611,844

Accumulated deficit

(704,562

)

(643,419

)

Total stockholders' deficit

(77,998

)

(31,563

)

Total liabilities and stockholders' deficit

$

590,248

$

607,740

Schedule 2

BIOSCRIP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

Three Months Ended September 30,

Nine Months Ending September 30,

2017

2016

2017

2016

Net revenue

$

198,692

$

224,542

$

634,608

$

695,466

Cost of revenue (excluding depreciation expense)

131,516

161,957

433,538

504,485

Gross profit

67,176

62,585

201,070

190,981

% of revenues

33.8

%

27.9

%

31.7

%

27.5

%

Other operating expenses

38,325

42,729

125,169

123,006

Bad debt expense

6,600

7,727

19,987

19,598

General and administrative expenses

9,784

9,948

29,287

30,413

Restructuring, acquisition, integration, and other expenses, net

4,037

2,368

11,171

9,326

Change in fair value of equity linked liabilities

1,080

-

1,080

-

Depreciation and amortization expense

6,552

4,166

20,329

12,956

Interest expense

13,175

9,331

38,635

28,212

Loss on extinguishment of debt

-

-

13,453

-

(Gain) loss on dispositions

(33

)

(3,015

)

652

(3,954

)

Loss from continuing operations,before income taxes

(12,344

)

(10,669

)

(58,693

)

(28,576

)

Income tax expense

60

421

1,397

593

Loss from continuing operations, net of income taxes

(12,404

)

(11,090

)

(60,090

)

(29,169

)

(Loss) income from discontinued operations, net of income taxes

(113

)

(174

)

(1,053

)

134

Net loss

$

(12,517

)

$

(11,264

)

$

(61,143

)

$

(29,035

)

Accrued dividends on preferred stock

(2,394

)

(2,138

)

(6,911

)

(6,192

)

Deemed dividend on preferred stock

(175

)

(173

)

(525

)

(518

)

Loss attributable to common stockholders

$

(15,086

)

$

(13,575

)

$

(68,579

)

$

(35,745

)

Denominator - Basic and Diluted:

Weighted average number of common shares outstanding

127,488

114,826

122,519

85,701

Loss from continuing operations, basic and diluted

$

(0.12

)

$

(0.12

)

$

(0.55

)

$

(0.42

)

Income from discontinued operations, basic and diluted

-

-

(0.01

)

-

Loss per common share, basic and diluted

$

(0.12

)

$

(0.12

)

$

(0.56

)

$

(0.42

)

Schedule 3

BIOSCRIP, INC. AND SUBSIDIARIES

QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES

(in thousands)

Three Months Ended

Nine Months Ended

9/30/2017

9/30/2016

9/30/2017

9/30/2016

Loss from continuing operations, net of income taxes

(12,404

)

(11,090

)

(60,090

)

(29,169

)

Interest expense

(13,175

)

(9,331

)

(38,635

)

(28,212

)

Change in fair value of equity linked liabilities

(1,080

)

-

(1,080

)

-

Gain (loss) on dispositions

33

3,015

(652

)

3,954

Loss on extinguishment of debt

-

-

(13,453

)

-

Income tax expense

(60

)

(421

)

(1,397

)

(593

)

Depreciation and amortization expense

(6,552

)

(4,166

)

(20,329

)

(12,956

)

Stock-based compensation expense

(545

)

(1,358

)

(1,573

)

(3,347

)

Restructuring, acquisition, integration, and other expenses, net (1)

(4,037

)

(2,368

)

(11,171

)

(9,326

)

Consolidated Adjusted EBITDA

$

13,012

$

3,539

$

28,200

$

21,311

(1) Restructuring, acquisition, integration and other expenses, net include costs associated with restructuring, acquisition, and integration initiatives such as employee severance costs, certain legal and professional fees, redundant wage costs, impacts recorded from the change in contingent consideration obligations, and other costs related to contract terminations and closed locations.